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By Noel T. Braymer

The bad news is weather is getting more extreme with each passing year. That’s not my opinion, the insurance companies which cover storm and wildfire damages have been seeing the number and amounts for claims going up every year in the last few years as weather has become more extreme. Extreme weather runs from extreme heat to extreme cold often at unseasonable times of the year. Just as extreme are long periods of drought turning into periods of heavy rains and snowfall. Extreme weather is taking an increasing toll on infrastructure such as dams, roads, pipelines, electrical grid and railroads. Recent rains in California has caused damage to railroads which has forced reductions of service this February.

With more stress on our infrastructure comes the other problem of years of deferring maintenance of our infrastructure. In the case of rail infrastructure, this is mostly privately owned. While adequate in the past, extreme weather is damaging ever more railroads. This is also affecting passenger service sharing the private freight railroads and disrupting service. An example of the fallout from weather damage to the private railroads on passenger service can be seen this February when a derailment on the UP during heavy rains in Elk Grove near Sacramento. This caused 22 freight cars to derail with several siding down into the Cosumnes River which was flooding at the time.This derailment shut down this UP Mainline for almost a week. The resulting rerouting of UP trains to alternative routes caused the cancellation of ACE service for most of a work week between San Jose and Stockton, San Joaquin rail service between Sacramento and Stockton and service on the California Zephyr. Heavy rains in Santa Barbara and Ventura Counties of up to 6 inches in a day led to the cancellation of Pacific Surfliner and Coast Starlight trains north of Los Angeles for track repairs.

Even when railroads are publicly owned and maintained there is a race to upgrade aging infrastructure to handle future extreme weather before these structures fail from future extreme weather. Much of the rail corridor between Los Angeles and San Diego has been greatly improved over the last 30 years or so. But there are still some problem areas. San Diego County has been busy replacing old single track wooden bridges on it railroad. As they replace these old bridges often with double track bridges, they are also building the new bridges with concrete and building them higher to withstand greater future floods. But San Diego still has major problems. These include the bluffs the railroad is on at Del Mar. The bluffs are subject to erosion and it is only a matter of time until parts of the bluff comes down due to the weather. There is also the canyon areas with slow running in San Diego by Miramar which could be damaged from weather. The biggest problem area is at San Clemente in Orange County. There the tracks are right on the beach near the ocean next to miles of bluffs. This leaves the tracks at the mercy in a major storm of being washed out from a major storm surge, buried in mud from a landslide during a heavy rain storm or even both at the same time in a future major storm.

Infrastructure problems go beyond the railroads to also include the electrical grid, water pipelines, oil and gas pipelines, sewers, roads and so on. The reality is the country has been falling behind other developed countries for years for infrastructure spending and improvements. Now there is one solution to raising funding for infrastructure which sounds painless. There are huge numbers of transactions in the financial markets like the stock exchanges. There have been proposals to place a tiny, fraction of a penny tax on each share for example. Because the volume of trading is so great, often with the same shares being bought and sold several times in a single day, this would generate billions of dollars in new tax revenue for repairing infrastructure. So who would oppose such a modest plan? Wall Street of course. In the past the taxes on oil and gasoline paid most of the cost for highway construction and repair. Local road are generally paid out of property taxes. The gas tax has remained frozen for about 20 years and due to inflation now is not paying the full cost of highway construction and repair. Also cars and trucks as they become more fuel efficient are per capita using less fuel and paying less in fuel taxes.

Infrastructure is more than about pipelines, roads and tracks. It is about public health, economic growth and the general welfare of this Country. Yet to “save tax dollars” repairs and investment in infrastructure have been deferred for years at the local, State and Federal level. Does this save money? No, because it cost more money both in repairs and lost revenue when you have a catastrophic failure of a critical part of infrastructure as oppose to timely maintenance or replacement. There is a matra that raising taxes is bad for the economy and that when taxes are cut the economy blooms. While many people would enjoy a tax cut, there is no evidence that lower taxes stimulates the economy. When President Reagan became President in 1981 he made major tax cuts as the heart of his economic plan. By 1982 the Country was thrown into the worse recession up to that point since the 1930’s and the Republicans lost control of the House of Representatives. After 1982 the economy improved after President Reagan raised some taxes and increased government spending by increasing the National debt.

There have been several states in the last 6 years which have cut taxes and spending in the hopes that this would increase taxes revenues. This hasn’t happened. The Governor of Kansas is unpopular with a majority of members of his own party. Because of tax cuts which have resulted in crashing States revenues, the Governor has slashed spending for schools and roads. The legislature recently passed a measure to raise taxes to restore services. This was vetoed by the Governor, so the lower chamber voted to overrule the veto, but the upper house while voting with a majority to override the veto just missed the super majority needed for an override. The State of Louisiana is also a basket case due to revenue shortfalls caused by tax cuts made by the previous governor. The football program at LSU was in jeopardy as a result by 2016.

In 2010 the government of the State of California was a mess. The economy had been sluggish for most of the 21st Century and the State had high levels of debt. Since 2010 the California economy has boomed. But not my cutting taxes. Several taxes have been increased. State spending has been under control and much of the State’s debt paid down. There has been increases in government spending on the State and Local Level. Much of this is for improvements in transportation, including rail service. It has been known by economists for a long time that investments in infrastructure have a high rate of return. All economies are based on spending. If someone or something has money it wants to spend (demand) there will be someone who will want to sell it to you (supply). California today shows that this is still true. There is a great pent up desire for infrastructure improvements still in this country. Transportation is high on the list of improvements people want.

We will have to do more about rebuilding infrastructure in the near future. Extreme weather will continue to damage and destroy all forms of infrastructure. We will have to replace it when this happens, which will take time and cause disruptions. Ideally upgrading and replacing vulnerable infrastructure to greater withstand future destruction from extreme weather can avoid the disruption and save money and lost productivity if we act before extreme weather destroys.

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